How the Blue Water Navy Act Revolutionized Jumbo Loans For Veterans

If you’re a veteran looking to purchase a luxury home or even just a multi-acre piece of land, the Blue Water Navy Vietnam Veterans Act of 2019 quietly did something revolutionary for you: it eliminated the cap on VA loan amounts.

That means qualified veterans can now secure zero-down jumbo loans—with no formal loan limit—anywhere in the country, including high-cost markets like Austin, Dallas, San Diego, or Naples.

Let’s break down what changed, why it matters, and how veterans are using these enhanced VA loan benefits to secure luxury homes and build generational wealth.

What Did the Blue Water Navy Act Change?

Although the Act is best known for expanding Agent Orange-related benefits to thousands of previously excluded veterans, Section 6 of Public Law 116-23 amended the VA home loan program in three crucial ways:

1. VA Loan Limits Were Eliminated
   Before 2020, VA loans were capped based on the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In most places, that meant a cap around $484,000–$766,000 (depending on the year and region).
   After the Act took effect in January 2020, there is no official VA loan cap for veterans with full entitlement. That means a veteran can now buy a $1.5M, $2.5M, even $4M home, with zero down payment, so long as they qualify financially.
2. Purple Heart Active Duty Members Became Exempt from the VA Funding Fee
   This was a new exemption created by the Act. Previously, only veterans with service-connected disabilities and certain surviving spouses were exempt from the VA funding fee. Now, active duty service members who have received a Purple Heart are also exempt. This change recognizes the sacrifice of wounded warriors still serving and lowers the financial burden of homeownership for those who’ve given so much.
3. Native American Veterans on Federal Trust Land Got Expanded Access to Zero-Down Loans

But the most widely impactful change, especially in today’s still-expensive housing market—is the removal of the loan limit.

What Is a Jumbo VA Loan?

A “jumbo” loan in 2025 refers to any loan amount exceeding $806,500 in most U.S. counties. Here's how the landscape has changed for VA borrowers:

• Pre–Blue Water Navy Act (before Jan 2020):
  • For example, a $1.5 million home would require a 25% down payment on the portion above the conforming limit.
  • Borrowers also faced higher interest rates, added reserve requirements, and private mortgage insurance (PMI).
• Post–Blue Water Navy Act (Jan 2020 onward):
  • There's no down payment required on the full loan amount, even on $806,500-plus loans—so long as the veteran has full entitlement.
  • This eliminates the need for PMI and significantly reduces upfront costs.
  • Jumbo VA loans now offer veterans access to high-priced homes—$1M, $2M, even higher—without the previous financial hurdles.

This dramatically boosts affordability and purchasing power for veterans looking at higher-end homes, second homes (if retaining entitlement), or properties in high-cost states like California, Florida, Texas, or Hawaii.

How This Impacts the Market in 2025

Save Cash Upfront with 100% Financing

One of the biggest advantages of VA jumbo loans is the ability to go 100% financing with no down payment. This isn’t just a benefit in theory—it can free up hundreds of thousands of dollars that would normally be tied up in a traditional jumbo loan’s down payment. Plus, since VA loans don’t require private mortgage insurance (PMI), you save even more month-to-month compared to conventional jumbo borrowers. These savings create real flexibility for veterans looking to invest, renovate, or simply retain more liquidity.

More Veterans Competing in High-End Markets

VA loan changes have opened the doors to markets that were once out of reach. We’re seeing more veterans confidently purchase homes in:

• Prestigious Texas neighborhoods like Westlake, Tarrytown, Bellaire, and Highland Park
• Expansive estate communities such as Leander, Magnolia, and Dripping Springs
• Prime coastal areas in California, where prices often exceed seven figures
• High-demand Florida destinations, especially those popular among retirees and second-home buyers

Why Most Lenders Still Get VA Jumbo Loans Wrong

Most lenders—even in 2025—still don’t realize that VA loans no longer have a cap. Despite the cap being lifted over five years ago, many loan officers continue to misinform borrowers or unnecessarily push them into conventional jumbo loans. That’s why working with a mortgage broker experienced in VA lending is so critical.

Some well-known lenders (including those with military branding) charge veterans inflated rates or hidden fees—assuming brand loyalty will override rate shopping. A VA-approved mortgage broker in Texas can compare dozens of lenders and often find a better deal with no unnecessary points or overlays, ensuring you’re taking full advantage of your hard-earned benefits.**

Real-World Example: A Veteran Buys a $1.8M Home in Dripping Springs, Texas

A veteran buyer in Dripping Springs, TX—a hill country community just west of Austin—had full VA entitlement and was ready to purchase a $1.8M property. Initially, he worked with a lender recommended by his real estate agent. Unfortunately, the lender wasn’t familiar with the Blue Water Navy Vietnam Veterans Act and didn’t realize that VA loans no longer have a cap.

The lender advised the borrower to pursue a conventional jumbo loan, which would have required a 20% down payment and carried a higher interest rate. Fortunately, the borrower found us just in time.

We helped him structure a VA jumbo loan with only 10% down, saving him over $180,000 upfront. Not only that—his interest rate dropped by 0.25%, and he saved an additional $5,000 in closing costs compared to the original quote.

This is exactly why working with a VA-approved mortgage broker matters—especially when you’re buying in high-cost markets and using benefits that some lenders still don’t fully understand.

Key Reminders for Veterans Using Jumbo VA Loans

• You must still qualify based on credit, income, and assets—especially with large loan amounts. VA underwriting looks closely at your ability to manage a larger monthly payment, so stable income and strong credit are key.
• Residual income requirements still apply, and jumbo-sized loans may require additional documentation. Expect lenders to verify your full financial picture—including reserves and debts—to ensure you're not stretched too thin.
• No loan limit ≠ no limits—your Certificate of Eligibility (COE) must show full entitlement. If your COE reflects a previously used or unrecovered entitlement, your maximum guarantee could be reduced, even if the property price qualifies.
• If you've used part of your entitlement elsewhere, a partial entitlement may still allow for jumbo borrowing. However, you may be required to bring a down payment to cover the difference between your VA guarantee and the loan amount.
• Lender overlays vary—some lenders may impose stricter credit scores or reserve requirements than others. That’s why shopping your loan through a VA-focused mortgage broker can make a big difference in your approval odds and overall deal.

Final Thought: VA Loans Aren’t Just for Starter Homes Anymore

Thanks to the Blue Water Navy Vietnam Veterans Act, your VA home loan can take you anywhere—whether that’s a modest home in San Antonio or a $3M ranch in Boerne. If you’ve earned the benefit, it’s worth maximizing it.

And in 2025’s higher-rate environment, every dollar saved matters.

At LendFriend Mortgage, we work with veterans across Texas to secure zero-down jumbo VA loans—without the games, junk fees, or inflated rates.

Ready to take the next step? LendFriend is here to help. Give us a call at 512.881.5099 or get in touch with me by completing this quick form, and I'll reach out as soon as possible.